Following are excerpts from Prime Minister Vajpayee's press conference at the Raj Bhawan in Lucknow.
The Prime Minister ruled out war with Pakistan and voiced apprehensions that President Pervez Musharraf would not be able to fulfil his pledge to end infiltration of militants into Jammu and Kashmir.
Vajpayee said the tension along the border had eased but ruled out the withdrawal of troops from the borders at the moment. "The situation at the borders is reviewed from time to time and decisions taken accordingly," he said.
Asked about apprehensions that neither the infiltration nor cross-border terrorism had stopped, Vajpayee said he shared such apprehensions.
But, he said Pakistan was tied to its assurance to halt cross-border terrorism and hoped international pressure would continue to be mounted on it to implement its promises.
The Prime Minister ruled out any dialogue with Pakistan until the latter stopped aiding and abetting cross- border terrorism and infiltration. In this connection the PM mentioned Gen Musharraf had assured the US during his talks with the Deputy Secretary of State Richard Armitage that it would permanently stop cross border terrorism and infiltration. "We hope that the assurances given to the US in this regard will be fulfilled," he remarked.
Vajpayee said India was always ready to talk to Pakistan on all bilateral issues, including Jammu and Kashmir but added that a conducive atmosphere was a must for holding of such a dialogue.
The Prime Minister termed as "unfair to him" when a reporter posed a question whether the country always looked at the US while formulating its policies on the stand-off with Pakistan.
"A proposal for a Deputy Prime Minister has come. It is being considered. Consultations with NDA allies are on and a decision will be taken soon", he said. (There have been reports that Home Minister L.K. Advani may be elevated as Deputy Prime Minister in the Cabinet reshuffle on July 1)
Vajpayee announced he would be making "major changes" in his Cabinet shifting some "important" BJP ministers to the organisation and inducting NDA constituents like Trinamool Congress and PMK.
The vacancies that may arise in the government following shifting of ministers to the organisation would be filled up, he said.
However, he ruled out the BSP forming part of the government saying it was not in the NDA.
"We have now started an exercise to make the government sensitive and responsive to people's aspirations," Vajpayee said adding that the objective of the reshuffle was to take advantage of the two-and-a-half-years of experience and bring desired changes in governance.
He said the stock taking of the government's performance had begun. When asked whether the exercise was reflective of the failure of the government, he said "We have seen the results of recent elections in some states. The results have given us a message and we have also learnt from them."
Farooq Abdullah's candidature for Vice-Presidentship
"Abdullah was considered for the Vice President's post but later his candidature was changed," Vajpayee said, adding that Dr Abdullah had been consulted by the government on the Presidential candidate.
The PM said Dr Abdullah had a meeting with him recently and gave the assurance that the National Conference would remain a part of the NDA and continue its support to the NDA.
Elections in Kashmir
The Prime Minister said the government was committed to ensuring free and fair elections and if warranted would consider imposing Central rule there. There was a proposal in this regard, he said.
Asked if the Centre would hold talks with the All Party Hurriyat Conference (APHC), Vajpayee said his government was always ready for a dialogue with it provided it was unconditional. He, however, said that APHC has refused to speak to Centre's interlocuter K.C. Pant.
In a later development, Vajpayee spoke to Abdullah and clarified that his answer was that the Centre was committed to ensuring free and fair elections in the state and the suggestion of imposition of President's rule was one of the options. According to the sources the Chief Minister was satisfied with the Prime Minister's clarification.
"When did the BJP abandon the Ram Temple issue," the Prime Minister retorted when asked whether the appointment of the hardliner Vinay Katiyar as the Uttar Pradesh BJP president was reflective of party's attempt to revive its Hindutva agenda.
On being asked for his comment on the Vishwa Hindu Parishad's decision not to abide by the court verdict on the vexed issue, he reiterated that the party's stand on this issue was clear. "We favour a negotiated settlement or accept a court verdict," he said.
"I do not want to reply to it," Vajpayee said cryptically when asked to comment on Kanchi seer Jayendra Sarswati's assertion that the Prime Minister was too busy to spare time for settling the Ayodhya issue.
Foreign Direct Investment
"The FDI in print media will not be allowed to be 'amaryadit' (uncontrolled)," he told a questioner. The decision was taken after pondering over the pros and cons of the issue and the apprehension being aired on this count were devoid of any basis, he said.
"The management and all the policy matters would be in the hands of Indians," he said allaying all apprehensions on this count.
Relations with Nepal
"We will not permit terrorists of other countries to create trouble there and will not allow our soil to be used for this purpose," Vajpayee said.
"Nepal is our neighbour and we want that peace prevails there", he said adding "we also want the constitutional monarchy to remain safe in the kingdom."
The Prime Minister said he had a wide ranging discussion with the visiting King Gyanendra Bir Bikram Shah of Nepal and expressed concern over the increasing activities of Maoists in the Himalayan kingdom.
The Middle-East situation
"We hope that the steps, that are likely to further worsen the situation, will be avoided so that there was no impediment in the final resolution of the crisis," he told reporters.
Asked to comment on US President George W. Bush's recent statement that he would like to see the removal of Palestinian leader Yasser Arafat and Iraqi President Saddam Hussein, the PM replied "We are closely monitoring the situation there."
Ties with the Bahujan Samaj Party
Denying there was any "bitterness" in the BSP-BJP relationship in the state, Vajpayee advised that "both the parties should learn from their past experiences."
He observed that there were "bound to be some problems whenever two parties come together."
Assistance to Uttar Pradesh
Vajpayee said he had received a memorandum from Chief Minister Mayawati stating the economic difficulties being faced by the state.
He said the Centre would consider the demands and all possible assistance would be provided to bring the state's economy back on the rails.
A team of the Reserve Bank of India would soon visit the state capital to look into the possibility of reviving the City Cooperative Bank. Vajpayee said the RBI team would discuss the matter with the concerned state government officials.
About the revival of UPTRON, the Prime Minister admitted that the attempts to revive the state-owned company had not been successful. He, however, said employees, who had opted for voluntary retirement, should be paid their dues.
Vajpayee, while terming the murder of Paritosh Pandey a "henious crime", expressed his condolences to the bereaved family and said the investigation had been handed over to the Crime Branch of the state police.
"The government was committed to ensure that the killers are apprehended soon", he said. (Journalist with a Hindi daily, Pandey was shot dead at his residence in Gomti Nagar here a few months back)